How to calculate the risk to reward ratio
Risk = |Entry − Stop| · Reward = |Target − Entry| · RR ratio = Reward ÷ Risk
Take an ES long at 5600 with a stop at 5590 and a target at 5625. Risk is 10 points and reward is 25 points, so the ratio is 1:2.5. In dollars, at $50 a point, that is $500 risked to make $1,250 per contract. The ratio doesn't change with size: two contracts double both sides. The position size calculator sets the size; this page checks whether the trade is worth taking at all.
Why RR ratio means nothing without win rate
A 1:3 trade sounds better than a 1:1 trade, but the ratio only tells you the payout. Whether that payout makes money depends on how often you get it. Every trade below runs to its target or its stop, and the result is in R, multiples of what you risked:
Expectancy (R) = Win rate × RR ratio − (1 − Win rate)
At a 30% win rate, 1:2 loses 0.10R per trade and 1:3 makes +0.20R. At 60%, even 1:1 makes +0.20R. So check whether your win rate is above the break-even rate for your ratio. The win rate calculator answers that from your trade counts, including whether the sample is big enough to trust, and the expectancy calculator does the same sum in dollars from your average win and loss.
Fees lower your real risk-reward
Costs come off every winner and add to every loser, so the ratio after fees is always worse than the one on the chart. The smaller the stop, the bigger the hit. An MES scalp with a 2-point stop and a 4-point target is 1:2 on the chart: $10.00 risked for $20.00. With $1.50 of round-trip costs it becomes $18.50 ÷ $11.50 = 1:1.61, and the break-even win rate rises from 33.3% to 38.3%. Exchange, clearing and NFA fees alone are $1.12 a round trip on MES, before any broker commission. On a 20-point stop the same costs barely register.
Planned risk-reward vs the ratio you actually get
Closing winners early and moving stops further away both shrink the ratio you planned, and neither shows up on a single trade. Log the planned ratio on your trades in ExpectancyIQ and the risk report sets it against the R you actually got, as RR efficiency (actual ÷ plan), once enough trades carry a plan. The trading dashboard shows win rate and expectancy from the same imported trades, calculated as described on the methodology page. More free tools are on the futures calculators page. This page is educational, not financial advice.